Article written by Adam O’Neill
Co-Founder at Asia Advisory – Building people to people links across Asia
Earlier in the year, an article piqued my interest at the volume of government investment going into the Korean startup ecosystem. According to the FT, the Korean government had earmarked $9Bn of investment to help support growth for startups, particularly focussed on AI, Drone Technology and Fin-tech startups. The three-year fund under the management of the Ministry for SMEs and Startups may only be in its first year but the scope of its influence and progress so far is nothing short of phenomenal.
The Korean economy mostly operates under a trickle down system, where the government invests heavily in new sectors and corporate initiatives, which then flows down to businesses in terms of tax breaks and government grants, which then flows on to create employment and future productivity improvements.
In 2015 the government invested approximately USD$11 million into 45 different startups, which expanded to USD$445 million into over 1,700+ startups in 2017
FT Article: “South Korea allocates first money from $9Bn Start-up fund”
During the past few weeks, we have been lucky enough to have spent considerable time in the market getting a first-hand look at the start-up scene in South Korea and wanted to share our observations.
The first impression was the overwhelming abundance of incubators and accelerators, there’s more than 60 of them from what I can gather. There’s also a large war chest of government funding to be accessed provided a handful of criteria were met. Although the majority of these incubators are in Seoul, they stretch across the country including as far south as Busan. Most offer a similar service, rent-free office space, mentoring and guidance, access to shared services such as Venture Capital, IP Lawyers, Product pro-typing, Recording / Photography Studios and subsidised food & beverage outlets. The majority of my time was based at the Seoul Startup Hub funded by The Seoul Metropolitan Government.
What Korean Startups have succeeded in 2018?
Support services for Foreign Startups to enter Korea
There is a specific visa for Startup Entrepreneurs called the OASIS visa. It allows people to get access based on points criteria. For example you get points for having attended university in Korea or abroad, additional points for having established patents, or having completed a Korean business registration. The centre also provides training, mentorship and a startup college for foreigners which will also give you points towards your OASIS visa. If you chose to use their incubation space which is free of charge for up to one year you will also be given 7 OASIS points. Business coaching attracts 5 points.
The Seoul Global Centre is not just for startups but can assist foreigners in a number of areas including; Tax, Accounting, the establishment of a company, IP rights, Trade and Customs.
For further information on the Seoul Global Centre please contact: email@example.com
What to do next?
If you are considering taking your startup to Korea I’d strongly recommend getting some time over in the market. Take a week to go and visit the spaces, talk to the locals, talk to other foreign startup founders, start to build your network. We’re even happy to make some introductions if you like. Please email firstname.lastname@example.org for more information.
In terms of timing, there will be further Seoul Startup Hub market access programs with dates to be advised. The other milestone worth aiming for is the K-Startup Grand Challenge which opens up applications between May-June with successful participants joining August – November.
We hope this overview has been a helpful start on getting to know the Korean startup ecosystem, it’s a dynamic beast and there is still so much to learn and the only way to do that is to roll up the jeans and get immersed in it.
The team from Asia Advisory will be returning to Korea again in the early new year of 2019 so please follow our social media accounts, ask us questions, leave feedback and we plan to share more updates shortly…
Please take a few moments to have a look at our other articles on the Korean Startup Ecosystem along with more of the latest thinking on our website. https://asiaadvisory.co/